With an agreement signed on 31 July 2012 by US and Pakistani
officials, Pakistan routes to Afghanistan were reopened, after its closure since
November 2011, when 24 Pakistani soldiers at a border post were killed by US air
raid. This is another landmark in the history of the relationship between the US
and Pakistan. It also demonstrates the strategic importance of Pakistan in the
logistics chain in trade and aid for the Central Asia region.

The two routes from Pakistan to Afghanistan were mainly used
by NATO to transport fuel and other supplies. Both routes originate at
Pakistan's principal port Karachi. From there, one route crossed the Khyber
pass, enters Afghanistan at Torkham and terminates at Kabul; while the other
crosses the border near Quetta and ends at Kandahar. Until the border closed
November last year, around 5,000 trucks a month had made their way from Karachi
port along both routes transporting NATO supplies to other NATO logistical hubs
in Afghanistan. There were more than 3,800 vehicles and 1,900 containers
belonging to NATO stranded at Karachi ports during the 7 months of Pakistani
border closure.

Strategically, these two important routes are expected to act
as the main transport backbones for goods loaded at Karachi ports and
transported to Afghanistan and onward to Tajikistan, Uzbekistan and
Turkmenistan. Their role of these routes through Pakistan will become
significantly more important with the commencement of operation of the Pakistan
Deep Water Container Port (PDWCP) at Keamari which is planned for in the first
quarter of 2014. This marks an important milestone in the development of ports
in Pakistan, which will be equipped with the most advanced container handling
facilities in the East region of the Indian Sub-Continent and become the gateway
of goods and people to its neighbouring countries, Central Asia and beyond. This
is a significant event for the people of Pakistan, and it is thanks to the
vision of the Ministry of Port & Shipping, Government of Pakistan and the
Karachi Port Trust (KPT).

Blessed with a natural geographic location, Pakistan is of
great importance in trade and development of the region, bringing long term
benefits to a combined population of around 100 million people in the Central
Asian region. Afghanistan is a good example where the majority of its trade is
facilitated by the ports of Pakistan. The US also relies on Pakistan ports and
its routes for most of their equipment for its war effort in Afghanistan. It
also needs Pakistani territory for meeting its fuel needs. Equipment and fuel is
transported from Karachi ports into Afghanistan through the Khyber Pass.
Strategic Forecasting, a Texas-based private intelligence entity noted that:
"Pakistan remains the single-most important logistics route for the Afghan
campaign. This is not by accident. It is by far the quickest and most efficient
overland route to the open ocean." It is obvious that Pakistan has the potential
to become an important trade corridor for South Asian countries. With the
opening of the PDWCP, Pakistan can further leverage its location advantage to
strengthen itself as the major hub to provide transit corridors for those land
locked countries, particularly Afghanistan, Iran, India and China.

Like any projects, execution is the key to success. It is
comforting to note that a great deal of progress has been made with the PDWCP at
Karachi, a major part in the logistic chain. However, more needs to be done to
ensure that the PDWCP realize its full potential. There is a pressing need for a
complete well considered plan to build the other part of the infrastructure
jigsaw puzzle i.e. adequate road and rail connectivity to upcountry destinations
and related logistics support facilities. Without this, the PDWCP will be under-utilised
and shall remain a half completed dream hampered by inadequate infrastructure
and services along the route as well as congestion in the areas surrounding the
port at Karachi. In my opinion, as I have stated before, a Deep Water Port Act
is imperative to recognise the efforts of all concern and to lend legitimacy to
other laws and regulation needed to further boost the entire logistics industry.

A well functioning transport system to connect between the
seaport and its surrounding land locked countries is the pre-requisite for trade
to take place and earn the wealth of the country. There is an urgent need for
Pakistan to improve its transport infrastructure and ensuring the efficient
management of all facilities through various public and private measures. As
stated by Javaid Mansoor from National Trade & Transport Facilitation Committee
Pakistan, means to enhance connectivity for land locked developing countries
include: "improve road and rail infrastructure and regional linkages; harmonise
trade and transport regulatory framework to remove barriers to trade; and enter
into regional and bilateral transit transport agreements laying down
procedures". Pakistan must sign TIR carnets and guaranting Association. TIR
carnet is of 20 pages and as of today 56 countries and 18 contracting parties
are using TIR. We must learn from Turkish experience. We may generate
substantial revenue as transit dues in foreign exchange.

These are not new to South Asian countries. The 14th South
Asian Association for Regional Cooperation (SAARC) Summit held in New Delhi in
2007 has decided to pursue the implementation of Asian Development Bank-funded
SAARC Regional Multimodal transport connectivity recommendations, however, solid
measures are yet to be taken and consensus is yet to emerge on projects to be
implemented.

Other than the "hardware" i.e. the infrastructure, there is
also a need to ensure that changes in the "software" goes hand in hand. There is
a need to examine the customs procedures, laws, and a tariff structure that
caters economically to stimulating regional trade. Ghana, Africa provides a good
example. In recent years, Ghana Ports and Harbours Authority has been very
active in promoting transit traffic for those land locked countries. For a
period of time, Ghana has been collaborating with its land locked neighbors such
as Burkina Faso, Mali and Niger for the enhancement and use of the Ghana
corridor. To attract transportation of goods to and from the landlocked
countries many agencies in Ghana have made efforts at collaborating with their
counterparts or similar agencies in the landlocked countries. For instance,
Ghana Shippers' Authority signed MOUs with its Shippers' Councils of Burkina
Faso, Niger and Mali in 1998, 2000 and 2003 respectively, for the purpose to
offer mutual assistance to shippers in the transport chain, exchange relevant
trade information within the region, initiate effective systems to monitor cargo
movement at Ghana corridor, harmonise customs procedures, promote free flow of
traffic between Ghana and land locked countries.

Pakistan can do the same! It is the mission of KPT and
Pakistan Government to take the initiatives to build connecting roads and
related infrastructure to cater for efficient cargo flow enabling the full
utilization of the Deep Water Container Port. There are already government
policies to support the growth of shipping, freight forwarding, distribution,
trucking, railroad transport, etc. It is encouraging to note that some
initiatives are already in good progress, for example, road transport agreements
between Pakistan and Uzbekistan, Tajikistan and Turkmenistan were initiated and
in recent past FPCCI hosted a meeting of CAS countries where I represented FPCCI
as Transport consultant. It is expected to see more measures to be initiated by
the Government as well as private sectors to capitalize on our strategic
geographical location and maximize benefits to Pakistan and its citizens. The
ultimate beneficiary of the use of the Pakistani corridor by the landlocked
countries is the Karachi Port Trust (KPT) and by extension, the government of
Pakistan. Transit cargoes will add to throughput at the port thus increasing the
revenue of the KPT.

Furthermore, it is expected new business opportunities will
emerge to support the operations of the Karachi port in the coming few years. I
can see there will be investment opportunities arisen for warehouse and other
storage facility providers, as these services are essential to transit trade and
the demand for them in and around the seaport will increase because forwarders
need a lot of time to arrange transportation of their cargoes to the consignees
in the land locked countries. Another business to be benefited from that is
freight forwarding providers, with cargoes originated from Karachi, these
company can provide economic solutions for movement of containers or cargoes
across the region over long distance to land locked states. The ICD's developed
at Lahore with Rail Road connectivity can play a vital role as Lahore is on
North/South and East/West corridor. Pakistan Railways must go on PPP by allowing
private sector to acquire rolling stocks and implement track access policy, as
rail road is the cheapest mode of transport after sea.

The construction of the PDWCP will no doubt enhance our
competitive advantage along the South Asian region further. The new terminals
will enable KPT to handle and cater fifth and sixth generation ships with
100,000 deadweight tonnage (DWT) having 16 metres of draft. As said by Azhar
Hayat, KPT General Manager (Operations) "The development of PDWCP will further
boost the volume of trade through Asian Highway Network and Trans-Asian Railway
Network." There is only one terminal is being planned at PDWCP at present, the
growth potential is tremendous. The Karachi Port Trust needs to be focused by
expending its resources on the PDWCP to bring the vision to fruition. KPT needs
to articulate its long term vision for the overall development of Karachi Port
in a manner that will attract further investment in future phases of the PDWCP.
We have sustained efforts, not piecemeal, to ensure that investors continue to
have interest in investing in future phases of the PDWCP, which effectively
supports the vision of our country.

Pakistan has all the necessary ingredients and tremendous
potential to emerge as the most efficient and advanced trade corridor for South
Asia region linking Europe with China and the East, after the opening of PDWCP
in few years time. As a Pakistani, I am confident that these will be done and
efforts from both public and private sectors will be expended to complete the
deep water seaport be the most efficient, advanced and profitable ports in the
region. Much has been debated by interested parties, professionals and experts
on the strategic location of Pakistan. But, we must go beyond just talk and no
action. Ministry of Ports & Shipping is the only vibrant Ministry inducing FDI
and local investment thus must be commended. I was witness to ceremony chaired
by PM of Pakistan at Governor House Karachi, where Minister of Ports & Shipping
initiated a proposal of joint venture company of PNSC and PSO, to acquire two
tankers so that all PSO imports in future be carried on Pak flag ships. It is a
good omen, thus efforts of Minister of Ports and Shipping and Minister of
Petroleum resulted in signing of MOU for a J.V. company and lifting of furnace
oil by PNSC so new purchases by PSO will be on FOB, not C&F as in the past. A
commendable initiative by Public Sector Companies as private enterpreneurs are
shy to invest in ship owning due to high financing cost,.

The Writer is Share holder Director Pakistan National
Shipping Corporation.